Expansion of EV shares in China and Europe is slowing down

In 2022, it is predicted that global BEV+PHEV registrations would account for 13% of all new vehicle sales. In 2023, this proportion is projected to rise to 15%. Assisted by "front loading" and the phase-out of subsidies, EV sales in China increased dramatically in 2022. With 6.5 million new BEVs and PHEVs in 2022, China is expected to surpass Europe as the world's largest EV market. The increase of the EV share in new sales, however, is anticipated to be severely slowed by the end of direct financial incentives (only 5% tax exemption is left). In China, it is anticipated that 28 new automobiles out of every 100 will be electric by 2023.
A number of European nations, including Norway, Sweden, Germany, the Netherlands, and the UK, are also making adjustments to their budgetary support for electric vehicles, pushing Europe as a whole toward a path of slower development. On the other side, the US is currently catching up more swiftly due to a credit limit of $7,500. In 2023, (plug-in hybrid) electric vehicles are anticipated to make up one out of every ten new automobiles and light trucks sold in the second-largest auto market in the world.

Estimated battery prices have risen to little over $150 per kWh for the first time due to supply restrictions brought on by underinvestment and the conflict in Ukraine (BNEF). This is similar to levels in 2020. The decreasing trend is unlikely to take up this year due to continuously high battery materials prices and impending shortages. This implies that even if more cheap models are released, price parity with conventional automobiles will be delayed and financial help for mainstream drivers will still be required. The decrease in government assistance in the mentioned nations clashes with this. Higher charging fees also increase expenses, particularly in Europe where an increasing percentage of potential EV drivers lack access to home charging.

However, from a corporate perspective, an even greater push for EVs in Europe in 2023 is expected as companies must disclose emissions and work to hasten the decarbonization of their fleets of vehicles. After 2025, several nations may even mandate the use of electric vehicles for business automobile leasing. Sales of EVs will also continue to be influenced by production. The supply of semiconductors has increased, but EVs still need more chips. Additionally, the shortage of batteries also explains why automakers like GM, Ford, and Tesla are cooperating with mining firms.

Source: ING

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A line graph titled "Expansion of EV shares in China and Europe slows as phase out of support begins" shows the percentage of electric vehicles in new car registrations from 2015 to a forecast for 2023. China leads at 28%, Europe at 26%, the global total at 15%, and the US at 10%.
Expansion of EV shares in China and Europe is slowing down Source: ING
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